According to Mortgage Choice’s annual First Home Buyer survey, 29.2 per cent of respondents said their biggest concern associated with owning a home was not being able to afford their repayments.
The report also revealed that 64.4 per cent of first home buyers who had purchased in the last 24 months would have bought sooner if they had received more financial assistance.
When asked whether the current level of government support provided to first home buyers in their state was sufficient, 57.3 per cent of respondents said ‘no’.
The survey found that first home buyers are increasingly relying on a parent or immediate family member to secure a home loan, with 4.9 per cent saying they had used the equity in a family member’s property as additional security for their loan. This is up from 3.9 per cent in 2015 and 3.8 per cent in 2014.
“It is quite disconcerting to hear so many first home buyers worry about how they will manage their debt,” Mortgage Choice chief executive officer John Flavell said.
“The reality is, interest rates have never been lower, meaning it should be easier than ever for borrowers to manage their debt.
“Most first home buyers would have an incredibly competitive rate... a rate they are unlikely to retain for the duration of their loan. If first home buyers are worried about meeting and managing their mortgage repayments now, how are they going to feel when interest rates start to rise?”
Mr Flavell said first home buyers should take advantage of the current low interest rate environment “to pre-pay their home loan and ultimately drive their debt down as quickly as possible”.
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Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.